Why I am slightly worried on Alibaba?
When I first invested in Alibaba, I was aware of the risk assosicated with VIE, which is why I only Invested 6% of my portfolio in it.
If Alibaba goes to 0, I may lose at max 6% of my portfolio. Which is why risk management and diversification is extremely important.
But here are my reasons why Alibaba will contonue to thrive after this "Tech clamp-down"
●Alibaba's earnings has grown at a CAGR of 30.4% in the past 5 years , EPS has grown more than 300% in 5 years and free cash flow has been enormous.
●Financial health of the company is extremely well. The company has more cash (484B) then debt (150B) And the debt to equity ratio is so low at 13.6%.
Comments by me:
Companys balance sheet is extremely healthy and revenue has been thirving. Political Crisis aside, the company is doing really well. I believe once this whole ordeal dies down, the company will continue to thrive and the stock can be valued all the way up to 300-500 USD.
I Agree there is some risk, but with the potential and the undervalued value BABA has now, I feel tje risk is worth it. Make sure to buy!
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